Are you developing an innovative product or have you already attracted investment? In Latvia, you can get co-funding for employee salaries and tax breaks for your start-up. This article tells you everything you need to know about the Latvian Investment and Development Agency’s (LIAA) support opportunities: from the conditions to how to apply.

Who can apply?

To apply, you must be a company registered in Latvia (e.g. a limited liability company) and:

– an innovative product is developed and ready for testing with first customers (MVPs),
or

– the company has received investment from a qualified venture capital investor.

Additional conditions: no tax debts over €150, no bankruptcy proceedings or sanctions, qualification as MSE (micro, small or medium-sized enterprise) and no presence in excluded sectors (e.g. gambling, real estate, waste management).

The company’s activities must be related to one of the RIS3 priority sectors:
Biomedicine, ICT, Photonics and Engineering, Bioeconomy, Smart Energy and Mobility. Full list: liaa.gov.lv

What kind of support is available?

1. Co-financing of wages (ACD)
 The State co-finances up to 45 % of the salary of an eligible employee (with a Master’s degree or equivalent experience). The work must be related to the RIS3 area. Certain hourly rates approved by LIAA apply.

2. Tax incentives
 A start-up company can get an exemption from personal income tax, a fixed payment of social security contributions and the possibility to transfer part of the tax to a pension scheme. The relief is only available to approved employees in full calendar months.

How to apply?

The application is submitted via business.gov.lv. It must state:

– the type of aid you want (ACD or tax incentives);

– documents to be attached: CVs and diplomas of employees, de minimis form, proof of MSE status, proof of SME or investment, etc;

– Project duration: 12 months or 24 months for an investment of €150,000 or more.

After submission, LIAA evaluates the application, sometimes with a presentation in front of a panel. Once approved, the contract is signed and project implementation begins.

Post-aid commitments

A final report must be submitted within 10 working days after the end of the project. Export and productivity data must be provided for the next 3 years, and responses to efficiency surveys for 5 years.

Where to find more information?

Detailed rules, forms and calculations can be found at:
liaa.gov.lv
business.gov.lv
likumi.lv

If you are not sure whether your company fits the criteria, HR Line EU will help you assess your options and prepare your application.